Professional Documents
Culture Documents
Budget Highlights
Expenditure: The government proposes to spend Rs 39,44,909 crore in 2022-23, which is an increase of 4.6% over
the revised estimate of 2021-22. In 2021-22, total expenditure is estimated to be 8.2% higher than budget estimate.
Receipts: The receipts (other than borrowings) in 2022-23 are expected to be to Rs 22,83,713 crore, an increase of
4.8% over revised estimate of 2021-22. In 2021-22, total receipts (other than borrowings) are estimated to be 10.2%
higher than the budget estimates.
GDP: The government has estimated a nominal GDP growth rate of 11.1% in 2022-23 (i.e., real growth plus inflation).
Deficits: Revenue deficit in 2022-23 is targeted at 3.8% of GDP, which is lower than the revised estimate of 4.7% in
2021-22. Fiscal deficit in 2022-23 is targeted at 6.4% of GDP, lower than the revised estimate of 6.9% of GDP in 2021-
22 (marginally higher than the budget estimate of 6.8% of GDP). Interest expenditure at Rs 9,40,651 crore is estimated
to be 43% of revenue receipts.
Extra Budgetary Resources (EBR): After a number of years, the budget has not relied on EBR or loans from
National Small Savings Fund.
Ministry allocations: Among the top 13 ministries with the highest allocations, in 2022-23, the highest percentage
increase in allocation is observed in the Ministry of Communications (93%), followed by the Ministry of Road
Transport and Highways (52%), and the Ministry of Jal Shakti (25%).
Main tax proposals in the Finance Bill
Income tax: There is no change in income tax rates for individuals and corporations.
Surcharge on Long Term Capital Gains (LTCG): Currently, the surcharge on LTCG on listed equities and equity
mutual funds is capped at 15%. The surcharge on other LTCG is 25% if total income is between Rs 2 crore and Rs
5 crore, and 37% if it is above Rs 5 crore. The budget proposes to cap these at 15%.
Tax on virtual digital assets: Income from the transfer of cryptocurrencies and non-fungible tokens will be taxed at the
rate of 30%. Any loss incurred from such transfers cannot be set off against any other income or carried forward to
subsequent years.
Updating return of income: Taxpayers will be permitted to file an updated return of income within two years of the
assessment year. They will have to pay 25% penalty on tax and interest due if it is filed in the year after the assessment
year, and 50% penalty in the second year.
Co-operatives: Alternate minimum tax for co-operatives will be reduced from 18.5% to 15%. Surcharge will be
reduced from 12% to 7% for co-operatives whose total income is between one crore and ten crore rupees.
New companies and start-ups: New domestic companies engaged in manufacturing have an option to pay tax at 15%
(without claiming any deductions) if they start manufacturing by March 31, 2023. Certain types of start-ups have an
option for tax holiday for three out of the first ten years if they incorporate by April 1, 2022. Both these deadlines have
been extended by one year.
Changes in customs duty: Customs duties on over 500 items have been changed. Many customs exemptions are also
being phased out.
Non-tax proposals in the Finance Bill
The Reserve Bank of India Act, 1934 is being amended to enable RBI to issue its digital currency.
Policy Highlights
Legislative proposals: The Special Economic Zones Act, 2005 will be replaced with a new legislation that will
enable states to become partners in ‘Development of Enterprise and Service Hubs’, covering all existing and new
industrial enclaves. Legislative changes will also be brought in to promote agro-forestry and private forestry.
Amendments will be made in the Insolvency and Bankruptcy Code to facilitate cross border insolvency resolution.
Fiscal Management: Rs 51,971 crore has been budgeted in 2021-22 towards settling the liabilities of Air India.
MSMEs: Emergency Credit Line Guarantee Scheme (ECLGS) will be extended up to March 2023 and its guarantee
cover will be expanded by Rs 50,000 crore to total cover of five lakh crore rupees. Credit Guarantee Trust for Micro
and Small Enterprises will be revamped to facilitate additional credit of two lakh crore rupees.
February 1, 2022
PRS Legislative Research Institute for Policy Research
Studies
3rd Floor, Gandharva Mahavidyalaya 212, Deen Dayal Upadhyaya Marg New Delhi – 110002
Tel: (011) 43434035, 23234801 www.prsindia.org
Union Budget 2022-23 Analysis PRS Legislative Research
Health and Nutrition: Under Ayushman Bharat Digital Mission, an open platform for National Digital Health
Ecosystem will be established. It will consist of digital registries of health providers and health facilities, unique health
identity, consent framework, and universal access to health facilities. A National Tele Mental Health Programme will be
launched to provide access to quality mental health counselling and care services.
River linking: The Ken-Betwa Link Project will be implemented at an estimated cost of Rs 44,605 crore. Five more
river linking projects are being implemented.
Labour and Employment: The Digital Ecosystem for Skilling and Livelihood (DESH) Stack e-portal will be
launched. The portal will help citizens learn skills, acquire credentials, and assist in finding relevant jobs.
Infrastructure: Projects relating to transport and logistics infrastructure in the National Infrastructure Pipeline will be
aligned with PM GatiShakti framework, which was launched last year. The Prime Minister’s Development Initiative for
North-East (PM-DevINE) will be implemented through the North-Eastern Council to fund development projects in the
North-East region. Also, one lakh crore rupees is being allocated to states for catalysing investments, in the form of 50
year interest free loans.
Roadways: The PM GatiShakti Master Plan for Expressways will be formulated in 2022-23. The National Highways
network will be expanded by 25,000 km in 2022-23.
Railways: One-station-one-product concept will be implemented to help local businesses and supply chains. 400 new
Vande Bharat trains will be developed and manufactured during the next three years. Further, 100 cargo terminals for
multimodal logistics facilities will also be developed during the next three years.
Telecom: Spectrum auctions will be conducted to facilitate rollout of 5G mobile services within 2022-23. A scheme for
design-led manufacturing will be launched to build an ecosystem for 5G as part of the Production Linked Incentive
(PLI) Scheme.
Energy and Environment: A battery swapping policy for electric vehicles will be implemented. Four pilot projects for
coal gasification and conversion of coal into chemicals required for the industry will be set-up. Sovereign Green Bonds
will be issued in 2022-23 for mobilising resources for green infrastructure.
February 1, 2022 - 2-
Union Budget 2022-23 PRS Legislative
Expenses which bring a change to the government’s assets or Budgeted vs Actual Disinvestments (in Rs crore)
liabilities (such as construction of roads or recovery of loans) 2,50,000
are capital expenses, and all other expenses are revenue 2,00,000
expenses (such as payment of salaries or interest payments). In
2022-23, capital expenditure is expected to increase by 24.5% 1,50,000
over the revised estimates of 2021-22, to Rs 7,50,246 crore. 1,00,000
Revenue expenditure is expected to increase by 0.9% over the
revised estimates of 2021-22 to Rs 31,94,663 crore. 50,000
2012-
2013-
2014-
2015-
2016-
2017-
estimated to meet 45% of its disinvestment target (Rs 78,000
12
13
14
15
16
February 1, - 3
Union Budget 2022-23 PRS Legislative
Indirect taxes: The total indirect tax collections are estimated to be Rs 13,30,000 crore in 2022-23. Of this, the
government has estimated to raise Rs 7,80,000 crore from GST. Out of the total tax collections under GST, 85% is
expected to come from central GST (Rs 6,60,000 crore), and 15% (Rs 1,20,000 crore) from the GST compensation
cess.
Corporation tax: The collections from taxes on companies are expected to increase by 13% in 2022-23 to Rs 7,20,000
crore. The revised estimates of 2021-22 indicate an increase in corporate tax collections to Rs 6,35,000 crore from Rs
5,47,000 crore at the budget estimate stage.
Income tax: The collections from income tax are expected to increase by 14% in 2022-23 to Rs 7,00,000 crore.
According to the revised estimate for 2021-22, income tax collection will be of Rs 6,15,000 which is 9.6% higher than Rs
5,61,000 at the budget estimate stage.
Non-tax receipts: Non-tax revenue consists of interest receipts on loans given by the centre, dividends and profits,
external grants, and receipts from general, economic, and social services, among others. In 2022-23, non-tax revenue is
expected to decrease by 14% over the revised estimates of 2021-22 to Rs 2,69,651 crore. This is due to a decline of 14% in
interest receipts and a decline of 23% in dividend and profits.
Disinvestment target: The disinvestment target for 2022-23 is Rs 65,000 crore. This is 17% lower than the revised estimate
of 2021-22 (Rs 78,000 crore).
February 1, - 4
Union Budget 2022-23 PRS Legislative
Expenditure by Ministries
The ministries with the 13 highest allocations account for 53% of the estimated total expenditure in 2022-23. Of these, the
Ministry of Defence has the highest allocation in 2022-23, at Rs 5,25,166 crore. It accounts for 13.3% of the total budgeted
expenditure of the central government. Other Ministries with high allocation include: (i) Consumer Affairs, Food and Public
Distribution, (ii) Road Transport and Highways, and (iii) Home Affairs. Table 4 shows the expenditure on Ministries with the
13 highest allocations for 2022-23 and the changes in allocation as compared to the revised estimate of 2021-22.
Table 4: Ministry-wise expenditure in 2022-23 (Rs crore)
Actuals Budgeted Revised Budgeted % change
2020-21 2021-22 2021-22 2022-23 (RE 2021-22 to BE 2022-23)
Defence 4,85,681 4,78,196 5,02,884 5,25,166 4.4%
Consumer Affairs, Food and Public Distribution 5,66,797 2,56,948 3,04,454 2,17,684 -28.5%
Road Transport and Highways 99,159 1,18,101 1,31,149 1,99,108 51.8%
Home Affairs 1,44,258 1,66,547 1,73,083 1,85,776 7.3%
Railways 1,12,159 1,10,055 1,20,056 1,40,367 16.9%
Rural Development 1,97,593 1,33,690 1,55,043 1,38,204 -10.9%
Agriculture and Farmers' Welfare 1,15,827 1,31,531 1,26,808 1,32,514 4.5%
Chemicals and Fertilisers 1,29,510 80,715 1,41,735 1,07,715 -24.0%
Communications 60,903 75,265 54,517 1,05,407 93.3%
Education 84,219 93,224 88,002 1,04,278 18.5%
Health and Family Welfare 80,694 73,932 86,001 86,201 0.2%
Jal Shakti 23,199 69,053 69,046 86,189 24.8%
Housing and Urban Affairs 46,701 54,581 73,850 76,549 3.7%
Other Ministries 13,63,136 16,41,398 17,43,372 18,39,751 5.5%
Total Expenditure 35,09,836 34,83,236 37,70,000 39,44,909 4.6%
Sources: Expenditure Budget, Union Budget 2022-23; PRS.
Communications: Allocation to the Ministry of Communications is estimated to increase by Rs 50,890 crore (93%) in
2022-23, over the revised estimate of 2021-22. This is mainly on account of capital infusion of Rs 44,720 crore in
BSNL.
Road Transport and Highways: Allocation to the Ministry of Road Transport and Highways is estimated to increase
by Rs 67,959 crore (52%) in 2022-23, over the revised estimate of 2021-22. This is mainly on account of an increase in
February 1, - 5
Union Budget 2022-23 PRS Legislative
investment in National Highway Authority of India (Rs 1,34,015 crore in 2022-23 as compared to Rs 65,060 crore
in 2021-22).
In 2021-22, transfer to states as support for COVID-19 vaccines was Rs 39,000 crore, higher than the budget estimate of
Rs 35,000 crore. Allocation for 2022-23 is Rs 5,000 crore.
Allocation towards the Ministries of Consumer Affairs, Food and Public Distribution, and Chemicals and Fertilisers
have decreased mainly on account of a reduction in food subsidy and fertiliser subsidy, respectively. We discuss the
expenditure on subsidies below.
Expenditure on Subsidies
In 2022-23, the total expenditure on subsidies is estimated to be Rs 3,55,639 crore, a decrease of 27.1% from the revised
estimate of 2021-22 (Table 5).
Food subsidy: Allocation to food subsidy is estimated at Rs 2,06,831 crore in 2022-23, a 27.8% decrease over the
revised estimate of 2021-22. A higher level of food subsidy was budgeted in 2020-21 and 2021-22 mainly on account of:
(i) Pradhan Mantri Garib Kalyan Ann Yojana, which provides for free foodgrains to poor to mitigate the impact
of COVID-19, and (ii) clearing loans of Food Corporation of India.
Fertiliser subsidy: Expenditure on fertiliser subsidy is estimated at Rs 1,05,222 crore in 2022-23. This is a decrease of
Rs 34,900 crore from the revised estimate of 2021-22. Fertiliser subsidy for 2021-22 was increased substantially under
the supplementary demands in December 2021. This was in response to a sharp increase in international prices of raw
materials used in the manufacturing of fertilisers.
Petroleum subsidy: Petroleum subsidy consists of subsidy for LPG and Kerosene. No kerosone subsidy has been
budgeted for either 2021-22 or 2022-23. Expenditure on LPG subsidy is estimated to decrease by 10.8% to Rs 5,813
crore in 2022-23.
Other subsidies: Expenditure on other subsidies includes interest subsidies for various government schemes, subsidies
for the price support scheme for agricultural produce, and assistance to state agencies for procurement, among others. In
2022-23, the expenditure on these other subsidies is estimated to decrease by 31% over the revised estimate of 2021-22.
Table 5: Subsidies in 2022-23 (Rs crore)
Actuals Budgeted Revised Budgeted % change
2020-21 2021-22 2021-22 2022-23 (RE 2021-22 to BE 2022-23)
Food subsidy 5,41,330 2,42,836 2,86,469 2,06,831 -27.8%
Fertiliser subsidy 1,27,922 79,530 1,40,122 1,05,222 -24.9%
Petroleum subsidy 38,455 14,073 6,517 5,813 -10.8%
Other subsidies 50,459 33,460 54,763 37,773 -31.0%
Total 7,58,165 3,69,899 4,87,872 3,55,639 -27.1%
Sources: Expenditure Profile, Union Budget 2022-23; PRS.
Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) has the highest allocation in 2022-23 at
Rs 73,000 crore. This is a decrease of 25.5% over the revised estimate of 2021-22. In 2021-22, allocation to the scheme
has increased by 34.2% from Rs 73,000 crore at the budget stage to Rs 98,000 crore at the revised stage, to mitigate the
February 1, - 6
Union Budget 2022-23 PRS Legislative
The allocation towards scheduled Scheduled Castes 71,811 1,39,956 1,42,342 1.7%
castes and scheduled tribes in 2022-23 Scheduled Tribes 49,433 87,473 89,265 2.0%
is estimated to increase by 1.7% and
2%, respectively. The allocation North Eastern Region (NER) - 68,440 76,040 11.1%
towards North Eastern Region is Sources: Expenditure Profile, Union Budget 2022-23; PRS.
estimated to increase by 11.1% in
2022-23 over the revised estimates of
2021-22.
In 2021-22, the government had set a budget estimate of 6.8% of GDP for fiscal deficit, and 5.1% of GDP for revenue deficit.
As per the revised estimates, the fiscal deficit is expected to marginally exceed the budget estimate to 6.9% while revenue
deficit is estimated to be lower at 4.7%.
Primary deficit is the difference between fiscal deficit and interest payments. It is estimated to be 2.8% of GDP in 2022-23.
Fiscal Deficit: Budgeted vs Actual (% of GDP) Revenue Deficit: Budgeted vs Actual (% of GDP)
10% 8%
7%
8% 6%
6% 5%
4%
4% 3%
2%
2%
1%
0% 0%
2011-
2012-
2013-
2014-
2015-
2016-
2017-
2018-
2019-
2020-
2021-
2011-
2012-
2013-
2014-
2015-
2016-
2017-
12
13
14
15
16
17
18
February 1, - 7
Union Budget 2022-23 PRS Legislative
2013-
2011-
2012-
2013-
2014-
2015-
2016-
2017-
13
14
40%
12
13
14
15
16
17
18
30%
20%
10%
0%
2015-
2016-
2017-
2018-
2021-
2022-
17
18
19
Note: Data for 2021-22 are revised estimate and for 2022-23 are budget estimate.
Sources: Economic Survey 2021-22, Union budget documents 2022-23; PRS.
Outstanding Liabilities: From 2012-13 onwards, the central government’s outstanding liabilities declined from 51% of
GDP to 48% of GDP in 2018-19. It increased to 61% of GDP in 2020-21. This is estimated to decrease marginally to
60% of GDP in 2022-23.
Outstanding liabilities is the accumulation of borrowings over the years. A higher debt implies that the government has
a higher loan repayment obligation over the years.
The interest payments as a percentage of revenue receipts have increased from 36% in 2011-12 to 42% in 2020-21. As per
the budget estimates, this figure is expected to increase further to 43% in 2022-23.
DISCLAIMER: This document is being furnished to you for your information. You may choose to reproduce or redistribute this report for non-
commercial purposes in part or in full to any other person with due acknowledgement of PRS Legislative Research (“PRS”). The opinions expressed
herein are entirely those of the author(s). PRS makes every effort to use reliable and comprehensive information, but PRS does not represent that the
contents of the report are accurate or complete. PRS is an independent, not-for-profit group. This document has been prepared without regard to the
objectives or opinions of those who may receive it.
February 1, - 8